Build Better Products Services Through Optimal Customer Feedback

GREG RYAN BACKGROUND § Research Manager and Product Manager at Cisco Systems • Built a Customer Feedback Process which became “best practices” § Consultant at J. D. Power & Associates § Research Manager at Nissan Motor Corporation § Product Line Manager at Plantronics § Product Manager at Schlage Lock § New Products Manager at K 2 Skis § Forte is “actionable” research Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 2

OBJECTIVES AND AGENDA OF THE PRESENTATION Build Better Products and Services Through “Optimal” Customer Feedback How to Maximize the Customer Feedback Process via Key Components Research Project Considerations What Information Should be Gathered How to Gather the Data Types of Research Questions & Answers Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 3

THE “MARKETING CONCEPT” “Determine the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors” Philip Kotler Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 4

Source: Winning at New Products Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved.

RESULTS OF POOR RESEARCH OR INSUFFICIENT RESEARCH Presentation_ID © 2006 Cisco Systems, Inc. All

WHAT HAPPENS WHEN YOU BUILD AN ASPARAGUS TRUCK VS. ICE CREAM TRUCK Presentation_ID ©

HIERARCHY Customers Stockholders Board President Executives YOU Presentation_ID © 2006 Cisco Systems, Inc. All

Key Components for a Successful Customer Feedback Process Sell Benefits Close the Loop with Customer & Execs Executive Sponsor(s) Find Champions & Customer Evangelists Compensation Metrics & Goals Customer Lifecycle Customer Partners Sales Marketing Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential Pre- Intro. : PRDs, MRDs, Betas, Field Trials 9

SELL THE BENEFITS OF GOOD CUSTOMER FEEDBACK • “Hit the target” on market requirements • Avoid building poor products and “fixes” • Improve product team efficiencies and priorities • Increase customer & partner loyalty and repeat business • Maximize revenues • Discover new products/services • Increase “share of wallet” over the competition • Portfolio penetration • “Leap frog” the competition • Better decision making Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 10

SELECTING EXECUTIVE SPONSORS AND CUSTOMER CHAMPIONS § Those who are customer focused § Likely candidates are close to the customer (marketing/sales) § Find champions in cross functional areas § Those who have strong influence § Will be supportive DON’TS § Recruit those who don’t have time § Simply looking for exposure Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 11

CUSTOMER LIFECYCLE Awareness Upgrade/ Optimize Consideration Evaluate Preference Support Order Use/ Operate Deliver Learn Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential Install/ Integrate 12

PRE-INTRODUCTION PROCESS § Product Requirements Documents (PRD) § Market Requirements Documents (MRD) § Betas § Field Trials § Labs Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 13

FEEDBACK FROM ALL MAJOR AREAS § Include all of the following groups: • Customers • Partners • Sales • Marketing (Trade Shows, Web, Newsletters) • Help Desk (TAC) 1) Gather input from above stakeholders PLUS 2) Get their opinions on areas for improvement § Use Secondary research Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 14

METRICS AND GOALS § “Overall measurement” plus areas in the customer lifecycle § Focus on known “pain points” § Customer defined metrics § Measurable and agreed to by stakeholders § Set metrics which can be tied to compensation § Use “Top 2” boxes vs. averages § Use realistic goals (PPI - Percent of Possible Index) § Metrics statistically sound § Benchmark the competition DON’TS § Don’t force it Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 15

COMPENSATION § Tie compensation to metrics § Agreed to by stakeholders § Enough to motivate them § Make it more of a “carrot” than a stick § Sliding scale vs. “all or nothing” § Tied to people who have a real impact § Get executive pay tied to metrics DON’TS Don’t force it Don’t create a potentially large negative “hit” Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 16

CLOSE THE LOOP WITH THE CUSTOMER & EXECS EXTERNALLY § Newsletter § Follow-up email § Trade shows, webinars, etc. § Only provide information that is non-sensitive and confident of action INTERNALLY § Track results and show Execs § Post results on a website, newsletters, email Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 17

WHAT CAN YOU DO IF YOU DON’T HAVE CUSTOMER FEEDBACK? ? Presentation_ID © 2006

RESEARCH PROJECT CONSIDERATIONS § Methodology - Qualitative vs. Quantitative (and method) - Stated vs. Implied - Numerous techniques § Eliminate bias (e. g. blind surveys) § Type of surveys (phone, online, panel) § Sample size § Screening of respondents § Wording of questions § Order of questions § Scales to be Used § Pricing § Types of Data (e. g. Nominal, Ordinal, Interval, Ratio) § Data Measurements (e. g. Mean, Median, Mode) § Data Analysis (e. g. sample variances, regression analysis) Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 19

WHAT INFORMATION SHOULD BE GATHERED? Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved.

EXAMPLES OF INFORMATION FOR “EXISTING” PRODUCTS & SERVICES § “New” needs or features desired (plus importance and benefits) § Importance of “current” needs or features § Changes and improvements § Usage: what, by who, how (maybe awareness problem) § Profile of customers across: demographics, geographies, business segments, vertical markets, etc. § Areas of satisfaction or dissatisfaction. Compare to importance. DON’T FOCUS ON PRODUCT – FOCUS ON SOLUTIONS Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 21

EXAMPLES OF INFORMATION FOR “EXISTING” PRODUCTS & SERVICES (cont. ) § Pricing, structure, willing to pay for, value § Packaging/bundling, sold standalone § How improve attach/renewal rates § The “customer experience” § Customer’s business needs Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 22

EXAMPLES OF INFORMATION NEEDED FOR “FUTURE” PRODUCTS OR SERVICES § Customer Level • Unfulfilled needs/pain points • Future business needs/problems • Company/industry changes • Regulations • Growth opportunities, etc. § Market Level • Strength of market importance • Identify potential areas for revenue growth • Price increases • New products: who will buy it, how used and by who • Prioritize features or desired needs • Upgrade/upsell opportunities Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 23

EXAMPLES OF “OTHER” INFORMATION § Future technologies: new paradigms § Beta or field trial feedback: Areas of satisfaction/dissatisfaction, what needs to fixed and how § Reseller/channel/sales feedback: areas of improvement, revenue opportunities, upsell opportunities, pricing issues, competitive issues, sales tools, marketing materials, etc. § Competitive/Market analysis: competitive opportunities, SWOT analysis, why are customers buying competitive products, etc. § Web or GUI feedback: changes or improvements to workflow, features, response time, etc. Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 24

GATHERING QUANTITATIVE DATA § Search and review existing primary and secondary research data first !!! § Set goals, objectives, target market etc. § Methodology, respondent types, sample size, list source § Get statement of work and costs § Hold stakeholder meetings § Screening respondents § Build survey draft - get approvals § Test skip patterns § Pretest § Send reminders § Adequate sample size § Clean data § Analyze results – “slice and dice” Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 25

DO’s OF QUANTITATIVE DATA § Get research team early § Get budget – including customer lists § Determine who are stakeholders and implementers § Target respondent list (e. g. segments, verticals, geographies) § Reasonable expectations on data delivery § Look at future list of research projects for synergies § For each question ask yourself “how will we use this information” § Agree to any metrics in advance § Develop plan for implementation of results (before survey goes out ) Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 26

DON’TS OF QUANTITATIVE DATA § Don’t initiate a project unless research team engaged § Don’t build actual survey yourself § Don’t contact customers or partners for research directly without researcher § Don’t send out a survey without an “optout” option § Don’t solicit business in your survey Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 27

COMMON TYPES OF PRIMARY RESEARCH § Surveys § Focus Groups § 1: 1 s/Interviews § Conjoint/Adaptive Conjoint § Max. Diff § Van Westendorp § Perceptual Mapping § Factor Analysis § Cluster Analysis § Discriminant Analysis § Regression Analysis § Gap Analysis § Kano, QSort § Many, Many Others Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 28

GATHERING ACCURATE QUALITATIVE DATA § Train teams § Have an approved discussion guide § Be consistent with all customers § Get a cross section of customers Don’ts § Create bias or lead the respondent § Rely totally on qualitative data Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 29

CUSTOMER PANELS AND SOCIAL MEDIA § Provides “directional” information § Qualitative information (usually) § Generally not used for making decisions § Screening of respondents difficult Don’ts Don’t rely on social media alone for conclusions Don’t draw conclusions from customer panels with small samples Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 30

HOW TO LEAP FROG THE COMPETITION Talk with customers about their: • Current business problems and pain points • Future regulations and inefficiencies • How you can save customers time and money • Products they wished you would sell • Companies they wished you would acquire Presentation_ID © 2006 Cisco Systems, Inc. All rights reserved. Cisco Confidential 31